The endoplasmic reticulum (ER) is the site of entry of proteins into the secretory pathway. It is responsible for proper folding of the proteins before delivery to their site of action. Furthermore, proofreading to detect malfolded or unnecessary proteins that have to be eliminated and regulation of protein levels are crucial ER functions. The ubiquitin-proteasome system, located in the cytoplasm, has emerged as the major ER degradation machinery. A multitude of ER resident as well as membrane-bound and soluble proteolytic substrates of the secretory pathway are retained in the ER and destined for degradation via this pathway. Their actual proteolysis is preceded by a retrograde transport to the cytoplasm. A key component of the translocation apparatus, Sec61p, is also the central subunit of the retrograde transport system. Other components of the translocon such as Sec63p or the lumenal chaperone BiP may also be involved in export to the cytosol. Novel ER membrane proteins such as Der1p, Der3p/Hrd1p, or Hrd3p might reprogram the translocon for retrograde transport. As ubiquitination is a prerequisite for degradation by the proteasome, exported proteins are ubiquitinated. Representatives of ER membrane-bound ubiquitin-conjugating enzymes, Ubc6p and Cue1p/Ubc7p, have been identified in yeast. Retrograde transport and ubiquitination seem to be coupled processes.